RR Donnelley's Q1 Results: Net Sales of $2.7B Up 2.7 Percent; Organic Growth Flat

CHICAGO—May 7, 2015—RR Donnelley & Sons (RRD) today reported financial results for the first quarter of 2015.

"Organic revenue in the quarter was flat to the first quarter of last year, but importantly, we saw improvement in this trend as the quarter progressed," said Thomas J. Quinlan III, RR Donnelley's president and CEO. "This performance, in combination with the success we are having with each of our four go-to-market strategies, keeps us on track to deliver full-year results in line with our previous guidance, which we reiterate today."

Net Sales
Net sales in the quarter were $2.7 billion, up $72.3 million, or 2.7 percent, from the first quarter of 2014, largely due to the acquisitions of Consolidated Graphics and the North American operations of Esselte. After adjusting for the impact of acquisitions, changes in foreign exchange rates, dispositions and changes in pass-through paper, organic sales increased 0.1 percent from the first quarter of 2014, as increases in the Strategic Services and Variable Print segments were partially offset by declines in the Publishing and Retail Services and International segments.

GAAP Earnings
First-quarter 2015 net earnings attributable to common shareholders was $22.3 million, or $0.11 per diluted share, compared to net loss attributable to common shareholders of $29.0 million, or $0.15 per diluted share, in the first quarter of 2014. The first-quarter 2015 diluted share count increased by 9.0 million shares from the first quarter of 2014, primarily related to shares issued in connection with the acquisitions of Consolidated Graphics and the North American operations of Esselte. The first-quarter net earnings attributable to common shareholders included pre-tax charges of $60.2 million and $148.1 million in 2015 and 2014, respectively, all of which are excluded from the presentation of non-GAAP net earnings attributable to common shareholders.

Non-GAAP Earnings
First-quarter 2015 non-GAAP adjusted EBITDA was $259.3 million, or 9.4% of net sales, compared to non-GAAP adjusted EBITDA of $276.5 million, or 10.3 percent of net sales, in the first quarter of 2014. The decrease in non-GAAP adjusted EBITDA was primarily due to price pressure in all four operating segments and volume declines in Publishing and Retail Services, both of which also negatively impacted margin.

Non-GAAP net earnings attributable to common shareholders totaled $51.9 million, or $0.26 per diluted share, in the first quarter of 2015 compared to $59.7 million, or $0.31 per diluted share, in the first quarter of 2014. The first-quarter 2015 diluted share count increased by 7.2 million shares from the first quarter of 2014, primarily related to shares issued in connection with the acquisitions of Consolidated Graphics and the North American operations of Esselte.

2015 Guidance
The Company reiterates the following full-year guidance for 2015, which excludes any impact of the previously announced pending acquisition of Courier Corp.:

About RR Donnelley
RR Donnelley (Nasdaq:RRD) helps organizations communicate more effectively by working to create, manage, produce, distribute and process content on behalf of our customers. The Company assists customers in developing and executing multichannel communication strategies that engage audiences, reduce costs, drive revenues and increase compliance. RR Donnelley's innovative technologies enhance digital and print communications to deliver integrated messages across multiple media to highly targeted audiences at optimal times for clients in virtually every private and public sector. Strategically located operations provide local service and responsiveness while leveraging the economic, geographic and technological advantages of a global organization.

Source: RR Donnelley.